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Corporate Strategy

In these days of uncertain markets – and an uncertain economy – risk can seem almost omnipresent. But how do you manage risk prudently – yet still grow your company? Harvard Business School professor Robert S. Kaplan began exploring risk management in the wake of the 2008 financial crisis, after he saw venerable firms such as Lehman Brothers and Bear Stearns collapse – despite having risk management functions. Here are a few of his insights on the topic of risk management.

When one company acquires another, executives have 10 distinct options for the corporate rebranding. Selecting the right strategy can set forth a compelling vision for the combined entity and send important signals to employees and the outside world.

Companies too often vacillate in their commitment to internal corporate venturing activities, leading to less than optimal outcomes. Executives need to better understand — and manage — the factors that drive cyclicality in internal corporate venturing.

For many product-oriented companies, establishing a corporate consultancy can be a good first step toward a more solutions-based orientation. As Ericsson, Shell and AT&T, among others, illustrate, the consulting unit can take a number of forms dictated by its key knowledge base and its relation to the product businesses‘ value chain. The challenge is to determine how similar the consulting unit should be to the parent company in identity, mission and structure.

The more companies outsource, the more they approach virtual organization, with knowledge centers interacting through mutual interest and electronic systems. To mitigate the risks associated with reduced authority, companies must develop “best in world” capabilities, leverage the capabilities of others and innovate constantly. The author shows how to slash innovation cycle times and costs by 60%-90% and develop the full potential of intellectual outsourcing.

Some of the greatest failings of strategic management, the authors say, occur when managers take one point of view too seriously. Ideas and practices that originate from collaborative contacts between organizations, from competition and confrontation, from recasting of the old, and from the sheer creativity of managers are driving the evolution of strategic management today.